Sector Update: Telecom

Sector Update: Telecom
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First Published: Wed, Feb 11 2009. 10 16 AM IST

Updated: Wed, Feb 11 2009. 10 16 AM IST
GSM operators reported 9.7 million net-adds in January’09 (8.5 million in December’08), assuming RCOM’s GSM net-adds in existing (RTL) circles in January were the same as in December (3,90,000).
Assuming RCOM reports 3 million GSM net-adds in new circles for January’09 and CDMA net-adds remain at their December’08 level of 2.2 million, total industry net adds for January would hit 15 million.
The entire 1.2 million m-o-m increase in GSM net-adds in January’09 came from Idea/BSNL/VOD, who reported an increase of 0.51 million / 0.44 million / 0.24 million in their net-adds.
Idea benefited from recent capex binge in both established and new circles. Including Spice, its net adds jumped to 2 million from 1.5 million in December. Mumbai, Bihar, Karnataka and Madhya Pradesh (MP) circles drove the surge.
At this monthly run rate, Idea’s Mar-09 subscriber base would exceed our 41.4 million forecast by 6.4%.
VOD reported an 11% m-o-m rise in net adds to 2.41 million (2.17 million in December) driven by newly launched circles - Bihar and MP - and a recovery in West Bengal / Kolkata.
BSNL’s net adds rose to 1.31 million (0.87 million in December) led by Maharashtra, Uttar Pradesh (E) and Punjab circles, which accounted for the entire increase in its January net-adds.
January net-adds of 2.73 million was flat vs. December, untouched by the recent surge in competition; we find this reassuring.
Nonetheless, Bharti’s mobile revenue growth is likely to be muted in 4QFY09, due to some pressure on ARPU/MOU coming from RCOM’s aggressive GSM promotional package.
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First Published: Wed, Feb 11 2009. 10 16 AM IST
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